Applying GAAP 2013-14

They argue that this is consistent with the principles for recognising liabilities. Most respondents took the view that the additional disclosures for financial institutions were a proportionate solution and there seemed to be broad agreement on the content of those disclosures.

It was also proposed that early adoption should be limited to those periods beginning after the issue of the standards, and that PBEs cannot apply the standards until a relevant SORP is also available. Those commenting generally thought that too much restriction had been placed on the ability to early adopt the new standards, and that any restriction should be limited to periods ending after the issuance of the standards.

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There were also some calls for FRS to be available as soon as possible in order that entities might be able to apply it for December year ends. Some of those doing so provided detailed reasons to support their view, but one theme coming through was that the simplifications proposed might be more suitable to small companies eligible to apply the FRSSE than those that are within the scope of FRS Different people may, of course, take different views of the boundary between necessary and unnecessary complexity.

A significant number of respondents regard any complexity inherent within FRS as necessary to lead to appropriate accounting for transactions that are themselves complex. Do you agree with the proposed amendment to Section 34 Specialised Activities setting out the accounting requirements for grantors of service concession arrangements? If not, why not? You are currently attempting to documents. The maximum number of documents that can be ed at once is In order to allow your request to proceed we have automatically split your selection into separate batches each containing a maximum of documents.

Skip to main content. Feedback statement — FRED Application of financial reporting requirements — FRED Reduced disclosure framework — FRED Respondents by category Category No. As proposed in FRED 47 A qualifying entity that is a financial institution should not be exempt from any of the disclosure requirements in either IFRS 7 or IFRS 13; or Alternatively A qualifying entity that is a financial institution should be exempt in its individual accounts from all of IFRS 7 except for paragraphs 6, 7, 9 b , 16, 27A, 31, 33, 36, 37, 38, 39, 40 and 41 and from paragraphs of IFRS 13 all disclosure requirements except the disclosure objectives.

Which alternative do you prefer and why? The main arguments for this approach were that: This will be addressed as part of the consideration of the responses to the insurance discussion paper; and b that the requirement to apply IFRS 8 when providing any segmental information might be counter-productive, because they might be seen as too onerous.

Question 4 — Definition of a financial institution Do you agree with the definition of a financial institution? It advised the FRC that: Question 5 — Specialised activities: Agriculture and service concessions In relation to the proposals for specialist activities, the ASB would welcome views on: Question 6 — Retirement benefit plans The ASB is requesting comment on the proposals for the financial statements of retirement benefit plans, including: Question 7 — Related party disclosures Do you consider that the related party disclosure requirements in Section 33 of FRED 48 are sufficient to meet the needs of preparers and users?

Question 8 Do you agree with the effective date? An impact of this is that many legal agreements that previously assumed GAAP-compliant financial statements would exist as a default may now be requiring something more onerous than is required by legislation. For registered charities, the situation is somewhat reversed.

Standards and interpretations not yet effective

Previously, charities were not required by their own legislation to prepare financial statements in accordance with GAAP. Whilst many have, many others have not which has led to a broad spectrum of quality of financial reporting being presented by charities. Registered charities that are below this threshold are required to apply approved Non-GAAP standards issued known as Tier 4 standards. Of course, an entity is always able to voluntarily adopt up to a higher level if they wish to.

The old accounting standards were not removed and at that stage the new NZ IFRS standards were seen by some as too large and complex for many entities. Then we had two GAAPs. However the difficulties of trying to use these two GAAPs to cover all entities in New Zealand encompassing the for-profit sector, public sector, and not-for-profit sector resulted in a call for more appropriate standards. This led to a two sector, multi-tier accounting standards framework being introduced in New Zealand.

The two sectors categorise entities as either public benefit entities with slight variations for public sector and not-for-profit or for-profit entities. Then we had two GAAPs.

Standards and interpretations not yet effective

However the difficulties of trying to use these two GAAPs to cover all entities in New Zealand encompassing the for-profit sector, public sector, and not-for-profit sector resulted in a call for more appropriate standards. This led to a two sector, multi-tier accounting standards framework being introduced in New Zealand. The two sectors categorise entities as either public benefit entities with slight variations for public sector and not-for-profit or for-profit entities.

The different tiers recognise different size and complexity of entities and hence essentially allow entities to use accounting standards appropriate to their size and complexity. Much of this has been in play in the for-profit space for the last year or so, but for many private entities the impact has been subdued due to the fact that older GAAPs have continued to be able to be used for periods commencing 1 April This leaves companies that no longer have a requirement to prepare GAAP-compliant financial statements with an important decision to make.

And for companies with more than ten shareholders this decision is now pressing, as it must be voted on by the time of the AGM or before six months after the start of the financial period.

Regardless of their type, entities that have not previously adopted NZ IFRS and even those that have previously applied NZ IFRS but applied differential reporting measurement concessions will have some new challenges to face if they produce financial statements under GAAP in the year. For-profit entities in particular will now have to move to a more complex set of rules — NZ IFRS Reduced Disclosure Regime — and the conversion process requires restatement and consideration of a range of issues that may not previously have been considered.

For companies, which all previously required an audit unless unanimous shareholder approval was obtained, they are now only legally required to have an audit if they are:.